Zillow has closed on its $500 million acquisition of the home viewing scheduling platform ShowingTime, despite the deal facing opposition and intense regulatory review.
Zillow first announced its plans to buy ShowingTIme in April, however the deal was held up when the Federal Trad Commission announced it was carrying out a review to ensure the merger of the two companies wouldn’t breach antitrust rules.
The FTC has powers to intercede in such deals under a 1976 federal law that’s designed to police antitrust behavior. The Hart-Scott-Rodino Act allows it to probe any company involved in a proposed acquisition, and block the deal from going ahead if it deems that competition will be harmed.
According to The Information, the FTC scrutinized Zillow over its market share and myriad aspects of the role it plays in the residential real estate market.
The FTC could have extended its review further or blocked the deal altogether, but did neither, allowing Zillow to close on the acquisition last week.
Zillow said in a statement that it has been open and transparent with the FTC during its review process. It said it intends to cooperate fully with all appropriate procedures.
“We believe a robust, competitive real estate market best serves consumers and are looking forward to ShowingTime helping improve the hour tour experience for customers and partners across the industry,” the company’s statement added.
Consumers may be wondering what all of the fuss is about, as ShowingTime has little visibility to the majority of users. The company’s platform is almost a backend technology that syncs with multiple MLS services. Through ShowingTime, agent can post their listings’ availability for showings, enabling buyers to schedule a viewing at a time that’s convenient with just a few clicks.
ShowingTime has become the leading viewing scheduling platform, with such a dominant market share that some real estate agents expressed concerns over Zillow’s takeover.
Zillow is slowly but surely expanding its presence into multiple segments of the residential real estate market. The company’s Zillow Premier Agent service allows real estate agents to pay a monthly fee for their listings to “pop up” on the Zillow website as users are browsing for homes. Zillow also operates its own brokerage, and has presence in iBuying with its Zillow Offers division.
Angelique Andrae, managing broker at Weichert Realtors in Silver Springs, Maryland, told The Information she was “very sad” to hear Zillow was allowed to buy ShowingTime. “Since they are now a broker, I also think there’s a potential conflict of interest there,” she said.
According to The Information’s report, that’s something federal regulators are concerned about too. It said one ongoing investigation is looking at how Zillow divides its listings into two categories – “listings agent” and “other agent” – based on whether the home that’s listed is promoted by an agent or coming from an MLS data exchange feed.
REX, a brokerage based in Austin, Texas, recently filed a lawsuit against Zillow over that practice, labeling it a “segregation rule”. REX’s motion to enjoin Zillow’s classification method was enjoined by Federal Judge Thomas Zilly. However, Zillow’s motion to dismiss the lawsuit was also dismissed, and the case continues.
Thanks for your informative article! It sounds like the Real Estate Brokers are just "sore" that Zillow has become so popular, and is cutting into their market. After all, isn't the object to help Sellers sell, and Buyers buy? Zillow is so much easier to use, and not restrictive to the public, like the "MLS" system. In my opinion, what they need now is to do away with "Lock Boxes", which require the Buyer to have a Real Estate Agent, in order to access the property. It would be much easier, if Zillow could just issue a one-time keypad code to prospective buyers, who provide identity verification, for security purposes. In my experience, most real estate transactions can be completed with the help of a good Title Insurance company...without the use of a Realtor. Thanks for the opportunity to "speak my mind".